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Halal deal reopens Malaysia trade door

New Zealand has hopes of regaining its $31 million beef trade with Malaysia now that it has resolved a six-year dispute over halal slaughter.

The trade took a dive after Malaysian authorities refused to accept meat from plants they said were not following halal principles.

Export tonnages of beef are now a fifth of the volumes sent to Malaysia seven years ago.

Sheep and cattle meat destined for Muslim countries must be slaughtered facing the holy city of Mecca. The Muslim slaughterman says a prayer as he cuts the animal's throat. The animal has been electrically stunned first so it does not feel pain.

After that, halal meat must be kept separate from non-halal meat as it is processed.

In 2005, Malaysian inspectors found fault with the New Zealand halal system, then managed by Malaysian and New Zealand Muslim authorities with the Meat Industry Association, and meat plants started to lose their licences to trade.

In a short time, approved plants went from 41 to two.

Over the next two years, meat exporters' attempts to resolve the issue made no progress and they asked the Government to step in. The Agriculture and Forestry Ministry and the Foreign Affairs and Trade Ministry became involved in 2007.

It took another two years before a draft export standard could be agreed on.

New Zealand stood firm on electrical stunning, saying it was an essential part of the process and was non-negotiable.

In December, the standard was finally ratified, with each country signing an agreement that sets out the rules for halal certification.

Since then, 14 meat plants have been approved to export to Malaysia and more are close to certification.

The latest figures, for the year till November 2011, show beef exports at 1683 tonnes worth $11.2m, down from the 8000 tonnes worth $31m exported in 2004.

Sheepmeat was also hit by the dispute but has quickly recovered in the past year. Exports are now at 9700 tonnes, up from 6000 tonnes in 2004, and are worth $58.5m.

The work put into reaching the agreement was recognised last year when the Agriculture and Forestry Ministry won an award for best service provider at the World Halal Forum.

The award means New Zealand is recognised globally as having the best halal system.

Ministry market access director Tony Zohrab said co-operation between the two countries had improved immensely.

"I can get on the phone now to the people in Malaysia, and I do regularly, and they just open up – it's great.

"We now know where the boundaries are when we didn't before, and we can work on improving the standards further."

Ad Feedback Meat Industry Association chief executive Tim Ritchie said the agreement was not "just a piece of paper".

It would be useful in dealing with other Muslim countries.

It was estimated in 2009 that the global halal food market was worth US$630 billion (NZ$777b) annually, 16 per cent of the food industry.